As we have said time and time again, the syndication business is a relationship business and our guest today, Hunter Thompson, once more highlights the importance of building these authentic connections. Hunter is a return guest, and in his previous appearance on the show, which we encourage you to listen to, he talked about all the work that needs to be done to get investors to a point where they consider crossing that investment finish line.

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Today, he follows on from this and talks about ensuring that you close the deal. While this is often the part that most syndicators look forward to, it takes a fair amount of work to get to this point. Hunter begins by sharing with us the two types of investor calls – the introductory and due diligence calls – and what the structure and purpose of each is. It is crucial to not only establish rapport and build trust with investors but to demonstrate your expertise and intricate knowledge, and both calls allow you to do this. It is also important that there are systems in place that help you both with efficiency and establishing your credibility as a serious syndicator and Hunter shares some of the systems and tools he has in place in his own work. When the deal is closed, it then becomes all about investor relations and Hunter shines a spotlight on several other simple, but effective ways to go the extra mile to ensure investors know they are your top priority. Once again, Hunter provides incredible insights for us all to learn from. Tune in today!

Key Points From This Episode:

  • Introductory or due diligence calls: the two reasons Hunter gets on the phone with investors.
  • Purpose of introductory calls: establishing investor credibility and building rapport.
  • Listen to the specific nuances of the answers.
  • Why Hunter shares his ‘last straw moment’ and why you should do the same.
  • Share your key motivating factor – the moral obligation that gets you out of bed daily.
  • If there is a solid relationship built, then fees and deal structure are not the central focus.
  • ‘Big picture investment thesis’: it is important to tie the conversation back to initial call motivation.
  • Create a time limit for introductory calls as it helps further establish credibility.
  • You cannot be desperate for capital: have faith that your investment is a good option.
  • The purpose of the due diligence call: establishing expertise and hashing out the details.
  • Restate the fact that you are being conservative in the executive summary.
  • Why it is a good idea to remove a small piece of income from the pro forma.
  • Make any well-educated, high end-investors known as it makes potential investors feel safe.
  • You want investors to move forward with you because they genuinely trust your knowledge.
  • Some tools you can use to systemize calls to increase efficiency.
  • Good investor relations will allow you to truly create wealth for yourself.
  • Establish and stick to an investor communication schedule, no matter if things go awry.
  • Silence always implies that something has gone wrong on the investment.
  • If possible, try to incentivize references and referrals.
You want them to think there's nowhere else I can go to get this type of personal connection. — Hunter Thompson Click To Tweet

Links Mentioned in Today’s Episode:

Hunter Thompson on LinkedIn

Hunter Thompson’s Email

WS389

Asym Capital

Raising Capital for Real Estate on Amazon

Raising Capital for Real Estate

Cash Flow Connections Podcast

Warren Buffet

Carl Icahn

Calendly

SheduleOnce

About Hunter Thompson

Hunter is a full-time real estate investor and founder of Asym Capital (pronounced AY-SIM), a private equity firm based out of Los Angeles, CA. Since starting Asym, Hunter raised more than $30mm in private capital for real estate offerings. He is the author of Raising Capital for Real Estate: How to Attract Investors, Establish Credibility, and Fund Deals. Hunter is also the host of the Cash Flow Connections Real Estate Podcast.

Full Transcript

[INTRODUCTION]

[00:00:00] ANNOUNCER: Welcome to The Real Estate Syndication Show. Whether you are a seasoned investor or building a new real estate business, this is the show for you. Whitney Sewell talks to top experts in the business. Our goal is to help you master real estate syndication.

And now your host, Whitney Sewell.

[INTERVIEW]

[00:00:24] WS: This is your daily Real Estate Syndication Show. I’m your host, Whitney Sewell. Today, our guest, you’ve heard his name before, is Hunter Thompson. Thanks for being on the show again, Hunter.

[00:00:34] HT: Hey! Thanks again. Appreciate it.

[00:00:36] WS: Yeah. I’m happy to have you back and really to continue our conversation. I would encourage the listeners to go back and listen to show WS389 where we really talked about building your infrastructure, creating content that can be repurposed. I mean, that alone, that is so important if you’re in this business. I can’t stress that enough to go back and listen to that show. Just for that piece if that was it. Then also the lead nurturing and just attracting investors and what that should look like, Hunter really did a great job of laying that out. But today, we’re going to go even further, and I’m really looking forward to getting Hunter’s take on some of these things and how he’s just really defined an amazing way of laying this out, so people can understand the best way to do it and get started.

So, a little more about Hunter, just in case you haven’t heard of him before, listen. He’s a full-time real estate investor and founder of Asym Capital, a private equity firm. He’s raised more than $30 million in private capital for real estate offerings. He’s the author of Raising Capital for Real Estate: How to Attract Investors, Establish Credibility, and Fund Deals. He’s the host of the Cash Flow Connections Real Estate Podcast, which I highly encourage you to go check out and listen to.

So, Hunter, thank you again. I’d love for us to just dive in. How do we get past that attraction phase, lead nurturing? All that we talked about. But we got to get him on the phone or we got to have that conversation. I’d love for us to talk about how you do that and what that should look like.

[00:01:59] HT: Okay. So, I’ll just say it like this. This is the part that most people are so excited about that they want to skip right to this. So, if this is the first time that you’ve heard me on the show, which Whitney’s been very flexible and allowed me to come on twice or more than that actually. If you haven’t heard the one specifically about attracting investors and nurturing them, this is not going to get you many results. This is the thing – When it comes to closing, this is what so many books have been written about. But especially in this space where you’re talking up 50, 100, 300, half a million-dollar investment amounts, it’s not can it be the difference between us closing strategies, saying the right thing at the right time that’s actually going to help you. So please go back and listen to that other interview.

Here’s why: we talked about in the last one where you’re basically building a funnel that looks like this where you have leads coming in the top and they’re working their way down from the attraction phase to the nurture phase to the education phase, and then comes the close. That’s what we’re going to talk about today, as well as some of the things about what to do after the investment has taken place.

So, for me in my system, it’s basically working your way down to a phone call. Now, we have had investors move forward without a phone call. But typically speaking, you do have to have at least one, if not two phone calls. So, when I do something, if I’m going to do it over and over again and we’ve had hundreds of investors, so I have done this over and over again, I want to ask myself, “Why am I doing this. What’s the purpose?” It’s one of those key hacks with anything that you’re doing. If you’re going to try to do that most efficiently, you have a clearly identified outline of what you’re trying to accomplish.

So, for me, there’s two potential reasons to get on the phone with an investor. It’s an introductory call and a due diligence call. Those are kind of categorically different, and I kind of explain why. So, the first call is the introductory call. For me, the main goals of this call, I want to build that rapport. I want to get to know a little bit about the background of the investor for a lot of reasons. One of which I want to get to know them, of course. Number two, I want to hear a little bit about their experience investing. What is the level of sophistication they are? Are they familiar with what a debt service coverage ratio is or is this the first time they’ve ever invest in the syndication? Because the language that they use and the language that they understand is going to be – Needs to be reflected in the way that I’m speaking to them, so they can get the most of the conversation.

I also – As I’m going through this process, I want to learn about their motivations to invest. When you have hundreds of these calls, you’re going to start to hear the same things over and over again. But it’s really important not to check out and just think, “Oh! No, no. I know this guy is going with this. Don’t do that. Listen to the specific nuances of what they say, because it’s going to be very important later in the call.” So, I’ll give you a couple of examples. I’m really concerned about the stock market. It’s too high and I’m worried up the downside of the stock market. Or they could say something completely different, which, “A stock market doesn’t provide enough cash flow.” “Well, what do you need cash flow for?” “Well, I want to pay off my retirement.: Okay. Those are two very different things, and speaking to the specific nuances there is going to drastically increase your close ratios later in the call.

[00:05:04] WS: That does many things. I mean, it shows them that you’re listening. It just gives you –

[00:05:07] HT: Certainly.

[00:05:08] WS: You can dig in a little more and just get more information about this individual. You may even hear them then share other things about their family or their kids or – That just helps in building that rapport and bringing that up later but go ahead.

[00:05:21] HT: That’s exactly right. That’s the whole point of this call. There’s two real points here. One is to establish credibility. The other is to build a rapport. However, the credibility part is really, really important. Sometimes, the relationship can actually be facilitated alone by the credibility. So, when you’re listening, you want to be approachable. But at the same time, they need to know that your time is extremely sensitive. So, the reason that they need to know this or the reason that they can know this is that this is a systematized process.

So, once they’ve kind of explained a little about their background and a little bit about why they want to invest, there’s two really important things that I like to share with them. One is I want to share with them my last straw moment. This is the moment that I realized thinking about money, thinking about finances, thinking about the whole world of investing and retirement the way that we were taught in school, when you realize that wasn’t going to work. The reason this is so powerful is, again, it’s like looking into a mirror, because everyone that’s interested in investing real estate had this moment at some point where they’re going about their business, following the rules, and they realize, “Whoa! This is not going to help me accomplish my goal.”

Now, sometimes, it could be something like 2008. That’s something very popular. “2008 happened. I realized I have to restructure my portfolio.” Or it could be something very personal, very specific. “I had an illness in the family and I realized that I didn’t have enough passive cash flow to take off time work to focus on helping my family member.” Ensuring those moments, that’s a personal connection, of course. But they’re going to have a similar one as well. So, again, it’s like looking into that mirror.

Something else I like to share is my key motivating factor, and that is the moral obligation of why I feel motivated to get out of bed and do what I do professionally. And Whitney, this is something you’ve obviously done an incredible job with. I know charity is a really important part of your life. I know you’ve adopted children as a really important part of your life. That is so compelling to investors, because they’re getting to know you as a person.

I cannot tell you how bad of an idea it is to jump in a call with an investor, send them an executive summary and just start going to do the pro forma. Then you’re competing over fees. You’re competing over nothing. You’re competing over price, which is just so inconsequential. You want to be competing. Here’s the thing. You don’t want to be competing. You want them to think there’s nowhere else I can go to get this type of personal connection. Then the fees and the structure, it doesn’t even matter as much when you have built that type of relationship. So, you’re not competing on price. That’s just such an important part of this introductory call.

[00:07:54] WS: That’s such a great point there. You want them to think there’s nowhere else they can go where they can get this kind of personal interaction. Yeah. I appreciate you sharing. When you start to share a little bit, it’s going to encourage them to share, right?

[00:08:06] HT: Yes.

[00:08:06] WS: Or maybe they shared and then you shared but if they’re not very vocal or if they’re not talking much or maybe ask questions to get some really short answers sometimes. When you start to share, well, then you’ll notice them to soften a little bit sometimes. I like how you mentioned that.

[00:08:20] HT: Oh, my gosh! No. It’s so common where you’ll get on the phone with them, and they’re structuring it. Sometimes, investors get on the phone with you, and they’ll act like it’s a sales call. They’re like, “Yes. No. Yes, I have invested in real estate before. No, I’m not really interested in whatever you’re interested in, whatever.” Then you start to open up with them and they go, “Oh, okay. Well, the truth is I had this incredibly pronounced last straw moment only three years ago, and now I’m completely dedicated to learning as much.” Oh, wow! Now, we’re having a conversation, and now it’s off to the races. So, I really like that.

This is kind of all alluding to going down your last straw moment, going down motivations to invest. Then it’s important to kind of circle back with what they mentioned the beginning about why they are motivated to have this conversation. Restate, repurpose what they have said. So basically, if you say, “Yes, I agree the cashless stock market is basically inconsequential. It barely keeps up with inflation, which is why I’m so excited talk to you about our investment thesis, our particular model,” and you show them the light. You say, “Look. Yes, you’re right. Your concerns are valid, but thankfully I had the same realization a few years ago, and this is why I focus on this.” That’s when you outline what I like to call your big picture investment thesis.

So, if you like multifamily, for example, you talk about the fact that less and less people are buying properties, the fact that millennials seem to be more inclined to not own and want to have a more flexible in terms of their living situation or whatever it is. Just a brief summary and then answer any questions that they have.

Now, I should’ve said this at the very beginning. But starting in the call, your mindset should be to establish that credibility. From my perspective, the easiest way to do this is to establish a start and end time very, very quickly upon jumping on that call. I like to do 30-minute introductory calls. The reason I mentioned now though is that after you’ve answered a couple of questions, you must, must, must cut off the call within four minutes of that end time, every single time. It doesn’t matter how close you think that they’re about to move forward or how engaging the conversation is. The goal of that introductory call is to establish credibility. So if you said you’re going to be on the call from 2:00 to 2:30, at 2:34, I’m so sorry. I have to go because I have another call that’s coming in.

Now, I don’t like to be an authentic. So, if you don’t have a call, number one, get another call. You should be filling up your schedule with calls like this. If you don’t have a call, fill your schedule up with something else, so you authentically must go to complete that next task even if it is to go try to find another call. I really like that in terms of the introductory call. It’s a good summary of something that’s really helped me in terms of thinking about the flow, how the conversation should go.

[00:11:02] WS: Could you tell me your – Or maybe give us an example of how you establish that early in the call and maybe how you say that to an investor? You’re on the phone, you cut if off, and you say, “I’ve got another call at this time.” What does that look like in that conversation?

[00:11:14] HT: So, from Wall Street to Main Street to Silicon Valley to Carl Icahn to Warren Buffett, everyone is making decisions based on emotional reasons. All the people that you think are like the least likely to do that, they’re probably the most likely to do that. I mean, talk to anyone in the world of VCs. How do you think these massive $50 billion valuations that turn into $10 billion – How do you think that happens? It’s because even at that level where it should be just totally analytics, it’s all about emotion. So, the emotional component is so critical that especially in the first 5 to 15 seconds, you have to establish that credibility of the call.

So, what I like to do is say, “Hi. This is Hunter with Asym. How are you?” You say, “Great!” I go, “So I’ve got a schedule from 2:00 to 2:30 and then I have to jump off because I have another call with an investor. So, if it’s okay with you, I’d like to jump right in.” They say, “Great.” Then I go, “Okay. Perfect. So, here’s the outline of the call today.” I have outlined it and I have set the start and end time. This does a lot of things. Number one, it establishes that you have another call. Number two, it makes them know that they’re not locked in to an infinite call where you’re going to go droning on and on and on and eventually just try to push them across the line, because it’s a will of attrition kind of thing, battle of attrition.

So that’s how I do that. At the end, at about 2:28 or whatever, I usually say, “Remember, just to give you a heads up, before I answer this next question, I do need to run at 2:30 because I have a hard stop at that point.” If it does start to go to that 2:34 number, I will then just say, “Look. I’m really sorry to have to go. Another call is coming in.” By the way, this is going to never cost you a sale, ever. It’s always going to help you in terms of credibility.

[00:12:50] WS: It’s hard to think that that way in the beginning, isn’t it? Because I know when I first started taking investor calls and I can remember I just wanted to like – I wanted to give it enough time that we could just talk as long as they wanted to. I never wanted to say, “Oh, I’ve got to go,” or, “I’ve got to end this call.” But, yes, the more you learn. It does establish credibility, because they see you’re structured. Like you said, they see you have more investors. They’re not the only one.

[00:13:14] HT: Right. Absolutely. I mean, when you get started – I mean, if let’s say you’re trying to raise a quarter of a million dollars, which is usually on the smaller end of what’s economically viable to do. Well, if you’re talking to an investor and you have a $25,000 minimum, you only need 10 investors. So, like every single one is like a life or death type of situation. The challenge though is that neediness is the number one killer of all capital raising. It doesn’t matter how good of a job you’ve done up until this point. If you show that you are needy for the capital, it’s not going to get across the finish line.

So, the way to do that though is to just kind of mentally exercise yourself to understand the reality of the situation. Number one, they’re on the call with you because they’re interested, and there’s good reason for them to be interested. I mean, you’ve talked to a lot of industry leaders. I know. I have too. You start to get in this mindset where it’s like me and you and Ron Cleef, and that’s like the whole world out there. It’s not like that at all.

The reality is there’s $15 trillion invested in bonds that have a negative interest rate. Okay, that’s the reality. People are so interested in low-risk, high-cash-flow, high-yield real estate. You start to lose sense of that. But when you start to realize the global situation, all that money – I’m going to say this again: $15 trillion. If the investment goes perfectly, it loses money. So that’s how desirable these investments you have are.

[00:14:35] WS: Okay. So, we better move on so we don’t run out of time too quickly. So, let’s get on. So, we’ve established that credibility, but it’s such a good point. It’s so important that we do establish that upfront. I had somebody do that to me a long time ago and I thought, “Well, that was – It’s really smart. I really like that.” It also kept me from going on and on and on in a conversation, because I know [inaudible 00:14:56].

[00:14:58] HT: Yeah, exactly.

[00:14:59] WS: So, what’s next?

[00:15:00] HT: Right. So, as the time starts to get close, you want to see if you can answer all of their questions. It sometimes happens where investors really just wanted to get and you know you personally before they move forward. But many times, they will want a more detail-oriented call where they can actually go through a lot of questions specifically about the deal. This is after that relationship, that emotional relationship has already been established.

Then I like to set up a due diligence call. There’s a couple different steps I like to talk about on this one. Of course, answering any questions they have, obviously, but it’s really about establishing expertise. I don’t mean establishing expertise like, “Okay. They want to defer to you, because you’re the professional. They’re a doctor. You’re not a doctor. You get to be the professional real estate investor. I get to be the doctor, blah, blah, blah.” No. That’s like a standard type of vibe.

I want the vibe to be that they come away from the call thinking, “Even if I dedicated all my time to this deal, I wouldn’t have a piece of the information that this person has.” That’s what expertise means. It’s not that I spent 100 hours on due diligence. You spent 100 hours on being a doctor. If you spent 100 hours on due diligence, we’d be in the same boat. No. It is like this person has gone to a level of detail that I can’t even fathom, and that’s how you get past investors. That’s even how you get accredited full-time real estate operators that still invest with you passively because of your level of expertise.

I’ll share one thing here. So, as the executive summary is being drafted, your marketing document for the deal, you’re going to include things in there that verify your claims are conservative in the sense that – let’s say that there’s a property that you own next to the property you’re about to buy. This other property, the one you already own, is renting at 4% per year rental rate increases. You include that in the executive summary and say, “But we’re only going to assume that this property increases at a rate of 3%. Therefore, we’re being conservative based on historical standards, etc.” You can include some other data points in there.

So, kind of restate the ways that you’ve been conservative. That’s going to help you. This, Whitney, I think this is probably the biggest key take away of this interview that we’re about to do right here. Do this right now if you’re in the process of raising money. When investors are getting on the call with you to do due diligence, they’re trying to uncover not only what type of person you are but whether or not you have put yourself in a position to deliver for them. So, what I really like to do is in the pro forma, I like to take a small piece of income and completely remove it from the pro forma. In the self-storage business, merchandise sales, things like selling tape and scissors and things like that, is not really going to move the needle in terms of NOI.

But later, if I’m on a call to an investor and they uncover the fact that not only am I being conservative in terms of rental increases and letting you know about it, I’m also withholding the fact that there is even more padding on there and that through this conversation, we have uncovered this. That is a very, very powerful, because $100 a month isn’t going to move the needle but what is going to move the needle is having an investor base that knows that you’re putting yourself in a position to deliver for them. Did I say that clearly? Because I feel like that’s something that –

[00:18:03] WS: I want you to just kind of elaborate on that again. So, you’re going to remove a piece of income that then you can talk about during the call.

[00:18:11] HT: Exactly. So, let’s say that there is – In self-storage, I mentioned — Let’s say that scissors sales, for example. They may account for $100 per month in income. It’s not really going to change the valuation of the property. It’s not going to impact the return profile at all. But during these investor calls, one of the things that many times they’ll ask is, is there anything else in numbers that I should know about. One of the things you can say is, “Well, also, we’ve done other things to pad the numbers in your favor such as we’ve completely removed sales from merchandise from the pro forma.”

Now, in all of our properties, we usually have a couple hundred dollars of sales for merchandise. But we just want to do as much as we can to buffer the numbers in your favor. Uncovering that and not explicitly stating it in the legal documents or the executive summary is very powerful from an investor’s perspective, because you’re doing it behind closed doors.

[00:19:02] WS: I like it. I like that a lot. That’s good. That’s good.

[00:19:05] HT: Very good.

[00:19:06] WS: Yeah. Let’s keep going.

[00:19:07] HT: One other thing, incentive alignment is really important. So, if you’re investing, make that known, of course. But also, sometimes people feel like it’s more powerful if it’s your friends and family that’s investing. Is your mother investing? Would you present this opportunity to your mom? If so, make it be known. Let it be known. Something else I like. Maybe if we’re dealing with investors that they don’t want to focus on this passive approach to investing. They want to invest passively and just receive the income.

One thing that they will really like to know is did you have someone who’s a really savvy investor invest with you? Someone that they can somewhat rely on the fact that, “Well, this Wharton grad who has a background in finance, he moved forward. So, I don’t really need to go to the double detail that he did. I wouldn’t be able to anyway even if I tried because of his background.” It’s very good to know those types of things. We have Ivy League investors. We have family office investors. We do make that known, because it makes investors feel good about that.

So, then it’s kind of working your way down the closing process. Answer any questions you have, establishing that credibility, etc. Then I like to, and this is so important, state the timeline for which all of this is going down. So, remind them that October 20th is the verbal commitment deadline. October 28th is the funding deadline. “Do you have any other questions? No?” If they do, go back to the top and think. Start over again. If not, ask them if they’re interested. That’s really it.

Now, this seems like – this is not a high-pressure strategy. It’s a strategy based on knowledge. You don’t want investors to move forward because of some neurolinguistic programming thing that you’ve done. You want them to move forward because you’re knowledgeable and you shared that knowledge with them. Then they usually will move forward, and you move to the closing process where you simply outline the process. Send them a PDF that outlines what you’ve outlined, and move them across the finish line.

[00:20:57] WS: So, at this point, you’ve already had that intro call. Now, we’re actually talking about a deal. They’re asking their questions. We’re doing that. You talk about stating the timeline. Then you said ask if they’re interested. I feel like a lot of people won’t do that. They won’t really have that asked. “Are you interested? What’s holding you back?” Is this something – From what you’ve told me earlier, this seems like this is going to help fix that problem or whatever it was that they mentioned, right?

[00:21:21] HT: Yeah.

[00:21:21] WS: But I wanted you to say like did you call them or did they call you in this call?

[00:21:27] HT: Yes. So, I mean, again, just with how many times we’ve had to do this, we like to make this super systematized. It’s something that’s really helped me over the years and hopefully a lot of the listeners are already using it. If not, I would start very, very quickly, is using an automated calendar app so that investors can see all of your free times, select the time that works for them, and they get all the information sent to them in an email and a Google invite. A couple apps for that are Calendly and scheduleonce.com. It’s either free or $10 a month, depending on which version you get. But if it saves you three minutes every time you schedule a call – We’re talking about hours a year, and then that may be even conservative. But, yeah, that’s a pretty remarkable tool.

[00:22:05] WS: I would say it’s very conservative. I know that say – I couldn’t operate all this without one of those tools.

[00:22:10] HT: Yes. I always call them. So, they provide their phone number and I call them and I do put a note in there that’s automated. It says, “If you don’t receive a call from me within five minutes, please call me at this number.” Because sometimes, they’ll put their information in incorrectly or something weird happened with the scheduler. But generally speaking, you should be the one calling them. You should be the one dictating the pace and the start and end time as well.

[00:22:31] WS: Nice. Okay. So now, we’ve asked and they said, “Sure. I want to invest.” Or maybe they’ve invested. We’ve closed. What do we do after that? Well, now is the important part. So, getting capital across the finish line is really like the least important thing in real estate. It’s the most lucrative thing. But in terms of actually delivering for your investors and actually creating wealth for yourself, it’s all about that investor experience from that point forward.

Now, I think I mentioned on the previous one. But if you have 600 investors investing $75,000 per year, that’s $45 million of investment capital every single year. That’s insane. Like you can be one of the major players in the noninstitutional space if you can get a couple hundred investors. So, thinking about that like that. They are the vehicle by which you can accomplish tremendous things in the sector. So, every time you interact with them, that should be on the top of your mind.

So as soon as we receive a wire from them, before we even send the countersigned documents, they’ll receive a thank you note from us. From all of our investors, they receive not only the ability to have weekly updates from our newsletter. We have a podcast that’s twice a week. We have a conference that is once a year. There’s all these opportunities for them to continue to build that relationship.

Recently, we started doing gifts for anyone that invested more than $100,000 in a year for us. They’re going to receive something like hot and cold cup, which I don’t have now, because I just got done traveling. Or something like this, which is our podcast logo on a charger, a charging device, which is cool. This thing costs like $30. But your investors are so valuable that this is a really good way to spend that $30, especially if you’re sending them to investors that invest in $100,000 with you. So, things like that really, really help.

Of course, anything related to the investment, it’s really important to establish the schedule by which you’re going to communicate with them and then stick to it. That sounds easy now. But as anyone that’s been in this business knows, it’s only important when it’s heart. So, you’re investing with real people with real properties. Real problems come up all the time. Boy, it’s much easier to just wait an extra week to see if you can resolve the problem prior to sending that quarterly report. Don’t get in the habit of doing that. If it’s something like you received incorrect information and haven’t quite received the correct information, send that update out to investors on time. You cannot get in the habit of sending that later or delaying that, because it’s a really hard habit to break. This is really pronounced if you have a really challenging situation.

So, let’s say that something like cash flow is going to be completely deferred for the quarter, because you had a weird situation at the property level. Make it be known. Let them know what the problem is, what your solution is, what you’re working on it, and the timeline in which you’re going to update them again and just continuing to do that over and over again. Again, it sounds easy if we’re just getting into this business now. “Oh, man.” It’s easy. But think about how hard it would be to receive information like that, multiply it by 10, and that’s how hard it is to send information like that.

So, view everything through the investor’s lens and just know that that’s going to really help alleviate a lot of the problems. The emotional component of the problem will be really removed if they know that you’re putting it as top of priorities as possible.

[00:25:49] WS: Silence already tells the investor that there’s probably something wrong. Or even if there’s not, they’re going to assume that there probably is.

[00:25:55] HT: That’s a complete jackpot. That’s right. They will assume the worst, which is by the way that you went to the Caymans. So just be honest with them.

[00:26:02] WS: Yeah. All right, Hunter. So, we got about five more minutes before we have to end this interview.

[00:26:07] HT: Thanks for the heads up.

[00:26:10] WS: But I wanted you to know that, so you can use this time most effectively [inaudible 00:26:14] the most important points here that we need to let the listeners know about. So even after the close or after we’re doing these updates or anything else.

[00:26:23] HT: Yeah. So, I’ll tell you this, the business of references and referrals is absolutely important and really critical. So, anything you can do to incentivize that in my opinion all of the work you’ve done so far to just ensure that their experience as an investor is really quality is really going to help you, because everyone wants to share great opportunities to work with great people. So, think about that opportunity, just without even creating a system around and just understand that that experience itself is going to be really helpful.

One of the things that I do though is that we do $200 gift cards for anyone that refers us an investor through Amazon. It’s basically cash or better than cash. That is, again, looking at the numbers. Play with whatever numbers you have based on your investment minimum, your assumptions for how frequently they will invest, etc. But that is a great way to spend $200. To attract an investor that was referred by another amazing investor, you’re really starting to add to that there.

To be honest with you, we’ve covered a lot of it. I think that treating investors as if they are the gateway to your – I mean, accomplishing all your wildest imaginations when it comes to financial stuff is really the way to do that. Doing anything you can to protect their capital. I’m sure that you have had people on the show before that have done insane financial things to show that they’re committed to that. I have a sponsor that we’ve worked with many times that bought a property in 2007. From my perspective, they weren’t really overleveraged, but the market just really fell out from under them, and they were in a situation where they couldn’t refinance.

It was a multifamily asset, very large asset, you would not expect this type of property to be challenged. But it was because of the lack of liquidity in the market. So, you think about it and you say, “What kind of communication are we going to send? Are we going to give this property back to the bank?” We’ve been able to make our investors millions of dollars throughout the year, but is this going to be the time that we really have to send that really bad communication?

A sponsor came out of pocket and wrote a check for a million dollars, personally. This provided enough liquidity for them to go through that period and later sell the property at an incredible gain. All of those investors are made whole and more than that had an incredible experience. Those are going to be investors for life. Now, that sponsor was able to write that check for million dollars. So, as investors, by the way, it’s good to invest with people that not only have the will. But also, if you can invest with someone that you think may be able to write a check for million dollars personally, I would take that bet over some good that couldn’t that has equal commitment to investors.

Again, that’s much easier said than done. As an adult, as someone who – This person has a family to say, “Listen, honey. We’re about to write this check, and hopefully these people will understand what this means to us.” Even though, from their perspective, it’s still been a headache dealing with this whole process. I’ve never been in a situation like that, but I can see that being very challenging. But when it’s the right thing to do and it’s possible, just think about that. That may shift your perspective on what goes on in this industry. But if you’re working with the right people, that should be on the table.

[00:29:29] WS: Wow, Hunter! Great content. We’re going to have to end the show, unfortunately. But I want you to tell the listeners what today is, what’s happening today, and I hope they’re paying attention.

[00:29:40] HT: Yeah. Well, again, I really appreciate it letting me have – Come on. I love your show. Again, I love your audience. You’ve had credible guests, so many episodes, so much content. I’m really impressed with what you’ve done. The book is out today actually, and you can buy it at raisingcapitalforrealestate.com. Go there. There’s also some amazing goodies as well. So, go there. Buy the book. Buy the bonuses. You get an audiobook and all this cool stuff, all these other interviews we’ve done with – That’s not available anywhere else. It’s all available on the website, raisingcapitalforrealestate.com.

[00:30:10] WS: Nice. We’ll have that in the show notes for sure. I hope you will go there and get a book, because we’ve only skimmed the surface, I’m sure of what Hunter shared in the book. It’s so crucial in our business. So, Hunter, thank you again. Any other place when they need to get in touch with you or your podcast?

[00:30:26] HT: Yes. So, if you’re interested in the podcast, it’s Cash Flow Connections Real Estate Podcast. In iTunes, that’s Cash Flow Connections, so three words there. If you send me an email and just tell me that you like this interview. I’ll send you a free e-book of ours about investing in self-storage. You can send me an email at info@asymcapital.com

[END OF INTERVIEW]

[00:30:45] WS: Don’t go yet. Thank you for listening to today’s episode. I would love it if you would go to iTunes right now and leave a rating and written review. I want to hear your feedback. It makes a big difference in getting the podcast out there. You can also go to the Real Estate Syndication Show on Facebook, so you can connect with me and we can also receive feedback and your questions there that you want me to answer on the show. Subscribe too, so you can get the latest episodes. Lastly, I want to keep you updated. So head over to lifebridgecapital.com and sign up for the newsletter. If you’re interested in partnering with me, sign up on the contact us page, so you can talk to me directly. Have a blessed day, and I will talk to you tomorrow.

[OUTRO]

[00:31:25] ANNOUNCER: Thank you for listening to The Real Estate Syndication Show, brought to you by Life Bridge Capital. Life Bridge Capital works with investors nationwide to invest in real estate while also donating 50% of its profits to assist parents who are committing to adoption. Life Bridge Capital, making a difference one investor and one child at a time. Connect online at www.LifeBridgeCapital.com for free material and videos to further your success.

[END]

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